Canadian HR Reporter Weekly

March 28, 2018

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2 Canadian HR Reporter, a Thomson Reuters business 2018 CANADIAN HR REPORTER WEEKLY Less than one year after unveiling its children and youth pharmacare strategy, the Ontario government has com- mitted to expanding the provincial health-care plan to se- niors by offering free prescription drugs to citizens over the age of 65. e change faces a June election test, as it would come into effect as of August 2019. e expansion will eliminate the deductible and co-payment fees seniors currently pay for the 4,400 prescription drugs under the Ontario Drug Benefit (ODB) program — including medications for cholesterol, hypertension, thyroid conditions, diabetes and asthma. e expansion of the Ontario Health Insurance Plan (OHIP+) will add up to modest savings for Ontario employers, according to Henry Toby, Ontario president of Gallagher, a benefit and HR consulting firm. "is isn't necessarily one that we see as being a boon to employers," he said. "When you look at the fact that we're just talking co-pays and deductibles for active employees over 65 — which is becoming a bigger and bigger piece of the workforce, no question — and retiree programs… for the most part, we're not talking significant cost alleviation for employers from this." Currently, OHIP+ provides free prescription drugs to citizens 24 years old and under — costs previously borne by employers, said Toby. As a result of the program's expansion, large organizations with ongoing retiree benefits will see more substantial savings, because a greater group will have deductibles and co-pays off- loaded to the government. "Even so, we're talking about just the co-pays and deductibles, not the actual cost of the meds, which was already being borne by the government," he said. Savings on deductibles, co-pays rough the ODB program, benefit plans position the government as first payer for eligible drugs prescribed to seniors over 65. e remainder of costs are then submitted for payment through an employee benefits plan framework. ose with an annual income of $19,300 or more pay a $100 deductible and a co-payment of up to $6.11 for every subsequent prescription, while seniors below that income threshold are exempted from the deductible and pay $2 for every ODB prescription — though many pharmacies waive that fee. e government expects seniors will save $240 per year as a result of the expanded OHIP+ program. "In Ontario, we already have the most generous senior coverage in the country," said Mike Sullivan, CEO of Cubic Health, a drug plan analytics firm in Toronto. "Even the highest income-earning senior only pays a $100 deductible every Aug. 1 on all ODB-eligible drugs. ey pay the first $100 out-of-pocket and then, after that, high-income seniors only pay a $6.11 co-pay for prescription," he said. "Every other province, with almost no exception, has an income-based deductible for their program and/or has substantially more out-of-pocket per prescription. Ontario's always been the most generous — by far — for seniors." e government's policy is generally slated towards seniors outside of the workforce, said Susan Seller, partner at Bennett Jones in Toronto. "Unless you meet one of the income tests or you have private coverage through your employer, when you retire, you can lose coverage that you've had for most of your working life and that's a significant change for many Free prescription drugs for seniors New program could mean modest savings for some employers in Ontario but bigger savings for larger ones with retiree benefit plans: Experts BY MARCEL VANDER WIER Sign up for the Canadian HR Newswire today for free and enjoy great content from the publishers of Canadian HR Reporter. HR News at Your Fingertips THE LATEST NEWS THE BEST COMMENTARY DELIVERED WEEKLY FOR READING ON ANY DEVICE Visit www.hrreporter.com/ canadian-hr-newswire

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